CAPE TOWN: South Africa is stronger than its peers with a stable outlook, despite various challenges, and a ratings change is therefore unlikely in the foreseeable future, Moody’s said on Tuesday.
Moody’s analyst Kristin Lindow, however, reiterated last week’s warning that Africa’s most advanced economy could be downgraded if the official commitment to fiscal consolidation and debt stabilisation falters, or if the investment climate deteriorates further.
Moody’s downgraded SA to Baa2 from Baa1 in November, citing poor prospects for medium-term growth and rising public debt in the continent’s most advanced but ailing economy. Baa2 is two notches from speculative or “junk” grade, and some analysts are expecting a downgrade to come soon as Moody’s looks to align its rating with peers Standard and Poor’s and Fitch.Moody’s is due to issue its next review on Africa’s most advanced economy in June. SA’s government has said its economic growth forecast for 2015 could halve to 1% from 2% because of power constraints. The government has said South Africans should brace for three years of power disruptions.
